What Americans Make

Last Friday, the Social Security Administration released its figures on how much money Americans made in 2010 from wages, salaries, and tips (but not from capital gains, dividends, or rents). Turns out that the 150,398,796 Americans for whom employers issued W-2 forms made just over $6 trillion in net compensation. If you calculate the raw mean average, that comes out to $39,959.30 per worker. But 66 percent of wage earners actually made less than that (or that amount exactly)—which means, the high level of pay for upper-income workers produced a much higher mean average than the average American worker actually makes. The median wage—the dollar amount that 50 percent of wage earners made more than, and 50 percent made less than—was $26,363.55. Twenty-six thousand bucks is what the average American worker makes on the job. That’s right in line with the figures for median household income, which hover around $49,000 once you total the income for everyone at home who has a job.

To be sure, once you allow for the income that people don’t report, or that they make on investments, the income level may rise a bit, even though the vast majority of Americans don’t have significant investments. If the minimum wage were higher, and indexed; if the rate of private sector unionization hadn’t been battered down to its current 7 percent; if manufacturing hadn’t shrunk to 11 percent of GDP, employing less than 10 percent of the workforce; if we hadn’t offshored our industry to China and stood idly by as wages in the States declined accordingly –- if we had done any of the things that could have preserved our once-vibrant middle class, then that figure would be higher than 26 thou. But we didn’t and it ain’t.

Keep this figure in mind when Republicans say they’re aghast that nearly half the households in America don’t pay income taxes. The reason for that is that at least half the American workforce is paid shit for their labor (and still pays payroll taxes, which means they get shit minus 15 percent). If Republicans want to squeeze more tax revenue out of America’s underpaid workers, there’s a simple way to do that: Change the laws so they get paid more.

Comments

I'm a bit confused about what this $6T means... the total GDP for 2010 is reported as almost $15T, of which $10T falls under the category of "Personal Consumption," which brings up the average per worker all the way to $69K. This is taking the other side of the equation and has some differences (includes all the income W2s leave out as well as any growth in personal debt, but why are these so different? Is it primarily investment income, or unreported wages (probably often from people who have no W2 at all, so that would reduce the $69K a bit by increasing the number of workers), or what? I don't disagree with the conclusions, just trying to understand the numbers.

I HAVE BEEN EMAILING AROUND THE INFO BELOW. I guess I need to change the $15/hr US median wage to $12.75/hr -- all of $2.75/hr above LBJ's $10.15/hr MINIMUM wage ($1.60/hr adjusted) and a big 25 cents higher than our 1968 median wage -- after 43 years of copiers (never heard of the typing pool? :-]), jet engines (only 5% the maintenance of pistons too), personal computers, the internet and every innovation in between doubled per person output. Strangest of all is that nobody even seems to know!

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Decades of de-unionization have left half our hourly wage workforce earning less than what the minimum wage woulda-coulda-shoulda been. Today’s median (not minimum) wage is $15/hr.

LBJ’s 1968 minimum was $10.15/hr ($1.60/hr adjusted). Doubled per capita output since 1968 -- as jet engines, copying machines (put millions of pool typists out or work), computers and improvements in between made us twice as productive per capita – would expect the minimum wage to increase at least 50% -- to $15/hr.

After the “big” $2.10/hr federal minimum wage hike, in early 2007, it remains $3/hr below LBJ’s. A $15/hr federal minimum wage would give half of America's hourly wage earners a raise at an easily computed cost of 3% direct inflation. My Chicago neighborhood Mac's traffic seemed to go up with Governor Blagojevich’s $8/hr minimum wage (Ike’s 1956 level!) – mostly in the third world end.

[Bonus: In the essay linked to above, the author (perhaps the strongest voice warning against irresponsible over lending) suggests that moderate inflation -- 4-6% a year -- could quicken our exit from the illiquidity contraction (would clear the real estate market). Would reduce real federal debt too.]
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All three parts at: http://ontodayspage.blogspot.com/2011/08/normal-0-for-30-years-republicans-have.html

Thank you for an informative post.
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